Arrival of First Group in Poland - Billion-Dollar Agreement Finalized with Santander
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Austria's biggest bank, Erste Group, is making some serious moves with a nearly 7 billion euro deal in Poland, and it's all about taking control of a chunk of Spanish banking giant Santander's Polish subsidiary.
Santander | The Dealinsight:-- | :--Date: May 5th, 2025 | Stake: 49% of outstanding shares | Price: 584 Zloty per share
Erste Group announced this mega deal on May 5th, 2025. They're buying nearly half of Santander's Polish subsidiary, officially stepping on the scene as a force to be reckoned with. Adding to that, the Viennese bank is also snapping up a 50% stake in Santander TFI, the asset management subsidiary, for around 200 million euros.
This is a significant step for Erste Group, marking their first major acquisition in years—one of the largest cross-border bank transactions in Europe in recent times. Santander is using part of the proceeds to kickstart organic growth in Europe and the US.
Peter Bosek, who took over as CEO of Erste Group in summer 2024, had shown an early interest in the Polish market. "I've been itching to get in here, and I'm stoked we finally managed it," he said during a conference call.
Santander
Investors were also feeling optimistic about the move. Erste shares rose by 7.8% in Vienna, while Santander shares gained 0.6%, and the subsidiary's Warsaw-listed shares took a dive by 6.7%. Marcin Materna, an analyst at Millennium Bank, commented, "It's hard to call the purchase of Santander a bargain, but that doesn't mean they're overpaying."
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The cash payment values Santander Bank Polska at 2.2 times its book value per share in the first quarter of 2025, implying a total price of around 13.9 billion euros. As the largest shareholder, Erste Group effectively gains control, despite only being a minority shareholder, thanks to some clever corporate law maneuvering.
So far, Poland has been one of Erste Group's last unexplored territories in central and eastern Europe. They'd been scoping out an entry for years, but acquisitions were usually too expensive, according to earlier statements by the bank CEO. Now, they've finally made it happen. "Today's the day," said Bosek. "After years of talk about entering the Polish market, we're finally doing it."
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Line chart with 52 data points.Chart für SantanderThe chart has 1 X axis displaying Time. Data ranges from 2024-05-06 14:00:00 to 2025-05-05 14:00:00.The chart has 1 Y axis displaying values. Data ranges from 3.985 to 6.535.Lade...End of interactive chart.
Santander Bank Polska is the third-largest bank in the country, with a market share of over 8%. With this acquisition, Erste Group's customer base will grow by around 36%, reaching approximately 23 million. "With the acquisition of a controlling stake in Santander Bank Polska, we're not only expanding our presence in one of Europe's most dynamic bank markets but also boosting our regional dominance in the CEE region," said Bosek.
Erste Group is aware of the Swiss Franc loans issue in Poland and is only taking on a "small part of the risk" as Santander provides guarantees for these loans, capped at 200 million euros.
This acquisition will be fully funded from internal sources, with plans to offset the costs by canceling a 700 million euro share buyback program, temporarily reducing the dividend payout ratio to 10%, and optimizing the balance sheet. The deal is expected to close by the end of 2025, subject to approval from Polish and European supervisory authorities.
- Erste Group, Austria's largest bank, announced a 49% stake purchase of Santander's Polish subsidiary for 584 Zloty per share, marking their first major acquisition in years and boosting their finance business.
- In 2025, Erste Group made a significant move in the investing world with a 1w deal, consolidating their presence in central and eastern Europe by acquiring a controlling stake in Poland's third-largest bank, Santander Bank Polska.
- Plans for financing the 2025 acquisition include canceling a 700 million euro share buyback program, temporarily lowering the dividend payout ratio to 10%, and optimizing the balance sheet.
- By the end of 2025, Erste Group hopes to complete the acquisition of Santander Bank Polska, aiming to expand their business and finance opportunities up to 2025 and beyond.
